Premier's $700m sports pledge is line ball

Premier s $700m sports pledge is line ball - The West Australian

Premier Colin Barnett shows his football skills in front of Sports Minister Terry Waldron, with stadium committee head Ron Alexander. Picture: John Mokrzycki/The West Australian

Colin Barnett's pledge last year that the Burswood football stadium would cost $700 million - plus $300 million in transport links, for a total of $1 billion - has been a nagging albatross around the project's neck since it was announced.

Plucked from mid-air during a press conference because the Premier said the media would "expect a figure", it has required all sorts of contortions since.

Suddenly that figure did not include the cost of landscaping the sports precinct surrounding the arena, for example, when the $700 million estimate subsequently seemed rather low.

People digging for dirt will be happy to know that an extra $70.2 million has now been found for landscaping.

So yesterday's "precise" number that the stadium will cost $902.6 million in 2018 dollars (plus an extra $356.2 million assuming the same cost escalation for the yet-to-be-detailed transport options) needs to be taken with a pinch of salt.

All up, the Government estimates that from 2018 it will hand over $1.2588 billion to the various stadium/transport builders.

Bringing that back to the same basis as when the Premier unveiled the plan in June last year, you get the "inflation- adjusted" amount of $1.0235 billion. That's close enough to the original $1 billion sum to be able to reject any suggestions of a blowout.

To underscore that costs won't rise, the Government yesterday placed great store in its so-called "design, build, finance and maintain" model for the stadium.

Under the model, the builder comes up with all the money, designs, builds and maintains the facility in return for a stream of payments over the life of the contract - in this case 25 years. Taxpayers retain ownership.

It effectively draws a line in the sand on costs and builders back themselves that they can make a profit out of the venture, avoiding a repeat of the Perth Arena debacle.

This is also good in the short-term for the Barnett Government's Budget, which is creaking under mounting debt in future years. But there is no free lunch: it shifts higher operating expenses into the future.

And it doesn't prevent delays.

The Goldfields regional prison is being built on the same model and is late.